Australian agtech is ushering in a new era for the way we farm.
Story Ken Eastwood Photo Drone-Hand
“There are over 500 agritech companies now in Australia, which is exciting,” Australian Agritech president Tim Neale says. “We’ve had 10 years of real hype and excitement.”
Many people in the industry are reporting that this is a “critical period” when the potential of artificial intelligence (AI) is being realised as it is applied to masses of farm data being collected. It won’t be long until you can simply ask an AI unit ,“How can I improve the efficiency and profitability of my farm by 20%?” and you can expect a bespoke, tailored solution.
In addition, the support structure for agtech startups (referred to as ‘the ecosystem’) has now been well established, whereas 5 years ago it was virtually non-existent.
A worldwide tempering of investment in startups over the past couple of years has seen investment in agtechs decrease since the peak of 2021. All Australian startups received $3.5 billion in funding last year, down 54% on the previous year. The ninth biggest sector was agtech, which received $170 million. Worldwide, $53 billion was invested in agrifood tech in 2021, but only $16 billion last year.
“It’s probably good it’s come back a bit from that peak, because it was probably a bit overheated,” managing director of AgriFutures Australia John Harvey says. “There were probably too many startups.”
John says that when AgriFutures first started setting up a better ecosystem for agtech companies in 2018, including the highly successful evokeAG events, only about $23 million was invested in agtech. “Back then the ecosystem was very immature. It was all the same people talking to the same people. Now, Australia doesn’t have an emerging ecosystem – we are an established ecosystem. We are vibrant and world-leading. We just have to own it.”
Tim says agtech should be receiving more venture capital funding in Australia. “There’s a huge amount of capital sitting around that has not been exposed to the agritech sector. Australian agritechs are only receiving 1/10th of the funding per capita of the USA … so we’re really working on a shoestring budget. If you really want it to be a $20 billion a year industry, then we need support.”
Sometimes the dollar figures talked about seem other-worldly, as do some of the terms used – for example, the ecosystem contains everything from angels (a rich investor who supports several startups) to unicorns (startups that develop a value over $1 billion). “We need to stop chasing unicorns and start funding cockroaches – the businesses that are going to stand the test of time,” Tim says.
This story excerpt is from Issue #155
Outback Magazine: June/July 2024
